The Indian stock market indices, Sensex and Nifty 50, are trading flat with a slight negative bias on Tuesday, dragged down by selling in bank, real estate, and energy stocks. Broader markets are underperforming, with midcap and smallcap indices each down more than half a percent.
On Monday, the benchmark Nifty 50 reached a new record high of 23,110 but saw profit booking at the peak level. Investors are cautious ahead of the Lok Sabha election results, which are set to be announced next week.
HDFC Securities has recommended two stocks to buy: NCC and Allsec Technologies. The brokerage suggests buying these stocks at current market prices and adding more if the prices dip, with a time horizon of two to three quarters.
HDFC Securities’ Stock Picks:
NCC | Buy | Target Price: ₹306
NCC has a diversified order book, strong execution capabilities, a focus on reducing debt, and improving working capital. The management expects revenue growth of around 15%+ for FY25, partly due to the elections. Lower raw material costs are likely to improve margins. The company expects the EBITDA margin to be between 9.5% and 10%.
The current order book includes more projects with an escalation clause, protecting against input price increases. Given the high order book, ramped-up execution, and robust balance sheet, HDFC Securities has updated its FY25/26 estimates. They expect revenue, EBITDA, and PAT to grow at a CAGR of 14%, 19.2%, and 32.4% over FY24-26E.
The base case fair value for NCC stock is ₹306, with a bull case value of ₹326 over the next two to three quarters. Investors can buy NCC shares in the ₹275-280 range and add more on dips to the ₹245-250 range.
Allsec Technologies | Buy | Target Price: ₹1,162
HDFC Securities is optimistic about Allsec Technologies due to expected acceleration in revenue growth, stable margins, consistent execution, delivery on guidance, and strong cash generation.
Investors can buy Allsec Technologies shares in the ₹1,043-1,065 range and add on dips in the ₹937-955 range. The base case fair value for Allsec Technologies stock is ₹1,162, with a bull case value of ₹1,261 over the next two to three quarters.
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